Countdown to Catastrophe: The Latest Updates on the Shutdown and the Debt Ceiling

The following first appeared in Think Progress. 

Members of Congress are racing against the clock to hammer out a deal that would reopen the government and lift the risk of default before October 17. On that day, the country will hit the ‘debt ceiling’ — that’s the day when the U.S. exhausts its borrowing authority, and, if there’s no deal, we’ll be forced to pay our bills with whatever cash is on hand, raising a serious prospect of default.

House Republicans brought the government to a shutdown by refusing to fund Obamacare, but with the added leverage of the debt ceiling, their demands have since grown. As we reach the final hours before the deadline, here’s the latest news on where we stand on getting a deal done:

The Newest (Old) Sticking Point: Birth Control

The latest thing that House Republicans are demanding in order to throw their support to a funding and debt limit bill? A birth-control related provision that allows the owner of a non-religious company to opt out of covering birth control for their female employees, citing religious reasons.

Coverage for birth control copays is one of the provisions in Obamacare, but Republicans have claimed that it requires employers to cover abortion. It does not. And, in fact, the administration has already compromised on the birth control point by exempting some organizations from this provision.

Two things to remember about this latest push: First, even if this is the magic puzzle piece to get House Republicans to approve their leadership’s proposal, it’s not going to go far. Sen. Harry Reid (D-NV) has already indicated that the House proposal is unworkable in the Senate, and this will only make it more unpalatable to Democrats there.

Second, this fight originated over government funding and the country’s debt. It has always been about economics and budget. This demand by Republicans has absolutely nothing to do with the country’s finances, and shows just how little their demands have to do with our fiscal future.

 12:00 pm

For House Democrats And Republicans, The Answer Is No

Rep. Chris Van Hollen (D-MD) tells the Washington Post’s Greg Sargent that the House Republican’s plan has “no Democratic support,” and that “a vote for this is a vote for default and for keeping the government shut down.” House Minority Leader Nancy Pelosi (D-CA) says there is support, however, for the Senate’s plan.

Meanwhile, Republicans aren’t seeing enough support for Republican leadership’s bill on their side of the aisle, either. CNN’s Dana Bash reports that House Republicans don’t have the votes to get their proposal passed.

 11:50 am

House Tea Party Demanding More Obamacare Provisions

Not content with just requiring members of Congress to enroll in the exchanges set up under Obamacare, the Tea Party Republicans are now demanding a provision to force all staff on Capitol Hill to enroll in the exchanges without an employer contribution.

Seventy-five percent of a Hill staffer’s insurance plan has been covered for a long time by their employer, the government. But thanks to some language added by Republicans onto the health care law, all Congressional staff now has to purchase insurance through the exchanges. A few months ago, the Office of Personnel Management ordered that staff can still receive their employer contribution, but they are not eligible for subsidies. This proposal would take away contributions, too, meaning that staffers (even those making earning the lowest congressional salaries) would be required to pay 100 percent of their insurance costs.

 11:39 am

Senate Majority Leader Harry Reid Slams House Plan

Senate Majority Leader Harry Reid (D-NV) said he was “blindsided by the news from the House,” and that it was a “waste of time,” particularly related to the House language that removes the “extraordinary measures” authority from the Treasury, and for removing the budget committee proposed in the Senate plan. “For weeks, Republicans have claimed they want to negotiate,” Reid said. “They’ve complained about a lack of a budget, now they don’t even want us to negotiate a budget.”

“Let’s be clear,” Reid added, “the House Republican legislation will not pass the Senate.”

 11:17 am

Boehner Gives Little Guidance At Press Conference

House Republican leadership today held a brief press conference around 11:00 am. Speaker John Boehner (R-OH) gave little indication of what might happen next. “There’s been no decision about what exactly we will do,” he said. Reps. Cathy McMorris Rodgers (R-WA) and Eric Cantor (R-VA) also spoke, but offered little more than talking points about working “on both sides of the aisle” to reach a deal.
 11:12 am

White House Rejects House Plan

The Obama administration is not interested in what House Republicans are offering. “The President has said repeatedly that members of Congress don’t get to demand ransom for fulfilling their basic responsibilities to pass a budget and pay the nation’s bills,” Amy Brundage, a spokesperson for the White House, said in a statement. “Unfortunately, the latest proposal from House Republicans does just that in a partisan attempt to appease a small group of Tea Party Republicans who forced the government shutdown in the first place.”
 11:09 am

Is The House Plan Constitutional?

The proposal in the House bill that would force members of Congress onto the exchanges established under Obamacare without employer subsidies is unconstitutional, if it’s set to go into effect right away. The 27th amendment to the Constitution stipulates that “[n]o law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.”
 11:01 am

How House Leadership Is Trying To Get Their Party On Board

National Review has obtained a copy of the House leadership’s talking points on their new proposal.

Clearly, the talking points show they’re trying to make their proposal sound like a big hit to Obamacare. The top-line talking point reads, “House Republicans are proposing several common-sense changes to make the emerging bipartisan agreement in the Senate fairer for the American people, who are being forced by Washington Democrats to live under the president’s train wreck of a health care law.”

From there, they say that their proposed requirement that members of Congress get health care under the exchanges established by Obamacare (and without any employer contribution) forces members of Congress to “live under ObamaCare” and to “not be shielded from the law.” On income verification for recipients of subsidies under Obamacare, the talking points say their proposal “[shuts] down the Obama Administration’s plan to invite rampant fraud by relying on the so-called ‘honor system.’” They also sell the removal of the treasury’s “extraordinary measures” by saying that their plan “[increases] the transparency of the federal budget process,” and their replacement of the delay of the reinsurance tax with the delay of the medical device tax by saying they’re eliminating “protections for labor unions.”

 10:44 am

House Bill May Not Get Enough Votes

Some of the more moderate House Republicans are telling reporters that they’re happy to support the House bill but, as Rep. Charlie Dent (R-PA) put it to TPM’s Sahil Kapur, “I don’t know if the votes are there to pass it.” Despite the fact that the new bill maintains sequestration levels of spending, the further right side of the House Republican caucus is worried there aren’t enough spending cuts. Rep. Mo Brooks (R-AL) even told reporters that he wants a bill that connects the debt limit to a Balanced Budget Amendment — a proposal to amend the constitution to require the United States to maintain a balanced budget. Such an effort is not only dangerous for the nation’s economy, it’s also totally unachievable since it would require 3/4ths of the United States to ratify it.
 10:17 am

Could Ted Cruz Kill The Emerging Consensus?

In order for the funding and debt bill to pass quickly, it needs what’s called “unanimous consent” in the Senate, which means that every Senator would need to give their okay on expediting the process. So even if the House and most of the Senate can agree on a measure to fund the government and lift the threat of default, that measure could never see the light of day if Sen. Ted Cruz (R-TX) decides to singlehandedly block it.

On Monday, Cruz hinted that he might not consent, telling Politico, “We need to see what the details are.” Meanwhile, his tea party partner in crime Sen. Rand Paul (R-KY) said he’s willing to move ahead with a bill, and that he “never really planned on trying to obstruct any of the process.”

 10:03 am

Here's Where Members Of The House Stand On The New Proposal

The House’s proposal seems to be relatively popular right now. It doesn’t have support of the far-right tea party crowd but, Robert Costa at National Review reports, that small group’s opposition isn’t influencing the roughly 150 more moderate Republicans who could make or break its passage.

There’s a real chance this proposal could come to the House floor for a vote and pass — particularly given the reports that Speaker Boehnerwon’t bother doing what’s called a ‘whip count’ to gauge his party’s support for the measure. That means it could rely on Democrats for passage, and get passed without a majority of Republicans.

 9:58 am

House May Leave DC After It Passes Its Bill

This tidbit from Ramesh Ponnuru of National Review spells trouble, if the Senate doesn’t like the House’s proposal:
 9:55 am

About The Extraordinary Measures Provision

Rumors are that the House’s emerging deal would end the Treasury’s ability to take what are called extraordinary measures to avoid default. Here’s Neil Irwin’s explanationover at the Washington Post of how extraordinary measures work:

The Treasury has regularly used a variety of cash management tools to enable it to continue to carry out normal spending operations when the nation runs into the legal cap on debt issuance, including timing tricks around public employee pensions and use of the “exchange stabilization fund”…. it’s a little like a family juggling its bills by holding off making a contribution to their 401(k) for a while. So technically, we hit the legal debt ceiling of $16.699 trillion way back on May 19, even though Oct. 17 is the D-Day that the Treasury has identified as when the debt ceiling needs to be raised if the nation is to meet its financial obligations.

Eliminating these accounting tricks (the full list is here) means we’d actually wind up hitting our debt limit even sooner, and there’d be no temporary way for treasury to stave off default. Extraordinary measures have been used by the Treasury for decades, under both Republican and Democratic administrations.

When removing extraordinary measures was originally floated last week, House Minority Leader Nancy Pelosi (D-CA) said of the proposal, “It certainly isn’t very smart.”

 9:38 am

The Emerging House Deal

We told you about the emerging deal in the Senate — now, here’s its House counterpart:
  • Funding the government at sequestration levels until January 15
  • Raising the debt limit until February 7
  • Income verification for recipients of subsidies under Obamacare
  • Delay of the medical device tax for 2 years
  • A requirement that all members of Congress and members of the cabinet sign up for the exchanges offered under Obamacare, with no employer contribution
  • Ending the ability of the treasury to take ‘extraordinary measures‘ to avoid default in the future
 9:27 am

More On The Reinsurance Tax

Actually, it looks like Democrats have decided to dropthe reinsurance tax, so scratch that. Instead, rumors are that Boehner will counter that proposal with a 2-year delay of themedical device tax, a 2.3 percent tax on medical devices that Republicans and many Democrats support repealing.
 9:21 am

On The Reinsurance Tax

A little bit more on how the “reinsurance tax” part of the Senate deal would work: The Transitional Reinsurance Program was established as part of Obamacare to help spread the inherent risk that comes from accepting everyone (including people with pre-existing conditions) onto insurance plans. It works by taxing all insurers — and, yes, that cost is passed down to the people, to the tune of about $63 per person — and then taking that revenue and reimbursing the individual insurance plans that take on the sicker patients during the first two years (2014-2016) of the new law. The Senate deal would delay the intake of money, but not the payments out.
 9:02 am

Tea Party Republicans Say No

After a meeting with Sen. Ted Cruz (R-TX) last night, it seems that House Republicans are set to reject the deal Reid and McConnell came up with. As National Review’s Robert Costa reports, the tea party wing of the House Republicans is furious that the Senate came up with a deal without their input:

A flurry of phone calls and meetings last night and early this morning led the consensus among the approximatley 50 Republicans who form the House GOP’s right flank. They’re furious with Senate Republicans for working with Democrats to craft what one leading Tea Party congressman calls a “mushy piece of s—t.” Another House conservative warns, “If Boehner backs this, as is, he’s in trouble.”

This is bad news, since House Speaker John Boehner (R-OH) has thus far refused to bring any legislation to the floor that doesn’t have support from this far-right contingent. Politico adds, “One House Republican said they would be lucky to find 20 GOP lawmakers willing to vote for this proposal.”

 8:56 am

The Senate's Proposal

Last night, Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) reportedlycame up with a proposal, which McConnelll plans to bring to the Republican caucus this morning at 11 am. Here’s what’s in their deal:
  • The government would be funded through January 15th
  • The debt ceiling would be extended through February 7th
  • The budget cuts known as sequestration remain in place, and January 15 remains deadline for an additional $21 billion in cuts
  • Federal agencies get flexibility in how they make the cuts required under sequestration
  • A committee would be established to have further talks on budget cuts
  • The committee would need to present a proposal by December 13th
  • reinsurance tax that is part of Obamacare would be delayed
  • Recipients of subsidies for their insurance under the exchanges established by Obamacare would be subject to income verification

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